Self Cert Mortgages - Self-Employed Mortgages - Self Assessment
Some banks in 2011 are still using the fast-track process when it comes to mortgage applications, and although self-certified mortgages have disappeared from the vocabulary of mortgage lenders, the self-employed can still get self cert mortgages although they now need to prove their income, lenders will now accept self-employed income into account if there are two years or more of business earnings that can be verified by tax returns and accounts.
Recently a warning that that disposing of the fast-track process could increase costs for lenders, The Council of Mortgage Lenders (CML) argues it is the customer that will bear the brunt if Self cert was truly abolished. fast-track mortgages have proved to be very successful in this high performing sector.
However If self-certified loans are considered as lower quality loans then the fact there are no lenders offering them is not a surprise. But if the economy and house market improves then all this money will come back into the market and then there is the possibility that lenders will come under pressure to consider self cert mortgages as a viable lending tool once again, although they may not use the same terminology, If it does happen then lenders focusing more on market share than credit risk will no doubt be the driving force, but lessons from the past must be learnt.
Getting a mortgage when you are self-employed
For most people who were self employed, being financially sound and able to make payments easily, were still being refused mortgages, so came along "Self Cert Mortgages". With self cert mortgages a borrower can provide a "self assessment" of their income. Self Cert Mortgages were a result of the 1980's boom in the UK when so many people were becoming self employed, this created a problem for people getting mortgages in the UK, a mortgage lender wanted to see 3 years accounts from a *certified accountant before they even considered lending money to the self employed, self assessment wasn't an option.
CHL Mortgages launched their new self-cert fixed rate product in 2006/2007 which was available at under 6%.The fixed rate was only one part of its self-cert range and was offered to the self-employed, with no requirement for proof of income or nosy accountants questions. It was a highly competitive fixed-rate mortgage and was Ideal for self-employed borrowers who needed the guarantee of a fixed rate at a time when base rate was rising.
Recent Troubles
Most financial advisors believe that the demise of self cert mortgages should be maintained after market recovery, this has practically happened already as Self-cert has almost vanished, 125% mortgages have also disappeared along with self-cert sub-prime although sub-prime (which started the recession in the first place) is still available. But despite the death of self-cert loans there are still enquires from prospective self-employed borrowers who eventually end up on different mortgage products.
all the best advice seems to suggest that borrowers offer no self-cert, no 125% mortgages and no delays to the registration of every broker.
Lenders that offer true self cert mortgages.
A true self cert application avoids the usual procedure of proving your earnings using...
- Certified accountants.
- Audited accounts.
- Employers references.
Self cert mortgage schemes
- Available to the employed or self-employed
- Available as mortgages or re-mortgages.
- Available as fixed rate and flexible rate
If you are self-employed you can still benefit from the fact that some lenders still do not make checks on your income - an experience broker will identify the schemes that work. So even if you can't prove income you can still get a mortgage at a competitive interest rate.
What is Self Cert? | Who Qualifies for self cert | self-employed | Non-status | Self Certifying a mortgage | Self Cert Rates
Problem Mortgages | Adverse Credit Mortgages
Other Terms associated with Self Cert Mortgages.
- Self Certification
- Self Certified
- Self Certificated
- Self Employed
- Self Assessment
- Non Status
*Certified accountant
A member of the Chartered Association of Certified Accountants. Its members are trained in industry, in the public's service, and in the offices of practising accountants. In the USA the equivalent is a certified a public accountant (CPA), who is a member of the Institute Certified Public Accountants. click here, for self assessment mortgages.